What Changed — From Raw Materials to Products That Use a Lot of Steel and Aluminium
The EU Carbon Border Adjustment Mechanism (CBAM) is moving beyond basic materials and down into parts and machinery. In December 2025, the European Commission proposed bringing roughly 180 steel- and aluminium-intensive downstream products into CBAM from January 1, 2028. On September 15, 2026, the European Parliament's plenary adopted its first-reading negotiating position and widened the scope to about 457 products, opening the door to manufactured goods such as solar panels and heat pumps. The Council's position is wider than the Commission's proposal but narrower than Parliament's.
This is not yet settled law. Trilogue negotiations among Parliament, the Council and the Commission are aiming for agreement by year-end, and both the product list and the start date may change as a result.
How This Differs From CBAM So Far — A Different Set of Companies Is Affected
Until now, CBAM has been an issue for material exporters in six sectors: steel, aluminium, cement, fertilisers, electricity and hydrogen. Going forward, processing and assembly companies come into scope — makers of automotive parts, industrial robots, AC motors, gearboxes, cooling towers and washing machines.
The Commission estimates that the extension will add about 7,500 new CBAM importers. The reporting obligation rests with the EU importer, but importers will turn to their Korean suppliers for the data they need. Suppliers that cannot deliver it on time risk weaker commercial terms.
Three Institutions, Three Lists — Where Does Your Product Fall?
Scope is determined by the EU's Combined Nomenclature (CN) code at the 8-digit level. The practical approach is to start from the first six digits of your HS code, identify the matching CN 8-digit code, and check it against each of the three lists.
How Embedded Emissions Are Calculated for Downstream Products
For downstream products, the core of embedded emissions is the emissions of the steel and aluminium precursors that go into them. That makes actual emissions data held by your material suppliers more important than data from your own processing operations.
Where actual values cannot be provided, default values apply. Defaults are set conservatively high, so even if you use lower-carbon material, you get no credit for it and your EU importer's certificate costs rise. The treatment of scrap emissions and the anti-circumvention provisions also matter for processors, but both remain under negotiation and should be checked against the final text.
A Preparation Roadmap Through 2027
The original six sectors are already in the definitive period: CBAM certificate sales begin in February 2027, and the first declaration and surrender deadline for 2026 imports is September 30, 2027. Downstream products are on a separate track with 2028 application under discussion, so use the experience of material exporters to secure enough lead time.
Government Support You Can Use
Existing programs such as the SME CBAM Response Infrastructure program and carbon neutrality consulting vouchers are worth considering for downstream product companies as well. Eligible products and requirements vary by program and by year, so always check the current announcement. When applying, have proof of EU export performance, HS codes by product, and process flow and energy use records ready in advance.
Once the trilogue concludes, re-check the following:
Working With KITIM
KITIM (Korea Institute of Technology Innovation Management) supports companies step by step, from assessing whether products fall in scope to building an embedded emissions calculation system and applying for government support programs. If you would like to know whether your products are covered by the CBAM extension or which programs you can use, please reach out through KITIM's consultation request. Our consultants will propose a preparation plan suited to your export products and supply chain.